A 101 guide to understanding the gig economy

Of the 12.6 million people employed in Australia in 2018, around eight per cent (1.57 million) were independent contractors.1 Many of these people would classify themselves as part of Australia’s growing gig economy.

In this blog, we explore what the gig economy is and why more and more people are choosing to work in it.

What is the gig economy?

The ‘gig economy’ is a term often used to describe the shift away from the traditional model of employing a full-time staff member to one that is gig-based. It sees businesses use the services of freelancers or independent contractors on a per-project or task basis.

Gig-based employment exists across a broad range of jobs and industries. Perhaps best known are the riders and drivers who deliver food for the likes of Uber Eats and Deliveroo, or the people who take on the odd jobs and projects that some two million Australians post on Airtasker.2

Increasingly, specialty industry marketplaces are connecting businesses to talent of all kinds. Weploy provides on-demand administrative and support staff. Sidekicker operates in the hospitality, event, admin and promotional space. There are Commtract and Cavalry Freelancing for creative and communications freelancers; MEETIG8 for risk, compliance and audit consultants; LawPath, which links businesses with a network of lawyers and legal services online; and Expert360 for individuals seeking corporate professional gigs spanning HR, technology, finance and operations.

The rise of the gig economy

The diversity of industries now offering gig-led employment is reflective of its rising popularity in recent years. Often described as ‘the future of work’, a research report by wealth management and advisory firm Morgan Stanley found that the number of freelancers in the European Union doubled between 2000 and 2014, and predicts that freelancers could make up 50 per cent of the US workforce by 2027.3

Pros and cons

Job satisfaction, work/life balance, and the freedom and flexibility to choose when, where and how you work are some of the key benefits of the gig economy. It can also provide additional income for those who already have a full-time or part-time job.

However, for some, the downfalls of being an independent contractor may include irregular and underpaid work, lack of job security and a stable income, and the loss of entitlements given to employees, such as sick leave, holiday pay, superannuation and regulated working hours and conditions.

It’s hoped that as the gig economy grows larger it will become better regulated with contractors given more rights and protections.

The gig economy terms to know

Gig economy: When businesses engage the services of freelancers or independent contractors on a ‘gig’ basis – for example, for specific tasks or projects.

Online marketplace: In the gig economy, an online marketplace is a platform or agency that helps connect businesses or individuals with freelancers or contractors to undertake short-term work or tasks. They can take various forms and operate in a range of ways, but, generally, use technology to streamline and manage the process between the two parties.

Independent contractors: An independent contractor is someone that works for themselves. As they run their own business, they manage the conditions, such as rate and hours, of their work, tend to use their own tools and equipment, can work for multiple clients, pay their own tax and don’t receive employee entitlements, such as paid leave or super.4

Joining the gig economy

If you’re thinking about trying the gig economy for yourself, here are a few tips that may help you to get started.

Do your research

Before you undertake any work, do some research. Look into how much work exists in your sector, what rate you should be charging for your level of experience and expertise, and how much income you could hope to generate. Learn what your rights and obligations are as a freelancer or contractor.

The Australian Government has a great online resource for independent contractors, including advice on contracts, dispute management, intellectual property and common law.

Use reputable platforms

Chat with freelancers you know about how they find work. Seek out online industry-related groups, such as Freelance Jungle Australia. They are often great outlets for asking questions, seeking advice and sharing knowledge. Read up on and join reputable online marketplaces or job platforms. Just be wary of any of that ask for free work trials or offer low rates.

Be prepared

It’s important to be across any financial or legal obligations you’ll have working for yourself, such as taxation or superannuation. Other considerations further down the track may include things like business insurance, and professional indemnity and public liability insurance. Having these in place can ensure you’re protected if anything unexpected occurs.

Are you considering starting up your own side hustle? Choosi lets you compare business insurance to protect your future goals. You can also find an income protection plan in case your side gig hits slow times. 

Choosi has no affiliation with any providers listed in this article.

Reference

Posted: 02 Jan 2019

This is general information only and does not take into account your personal objectives, financial situation or needs. You should consider the relevant PDS available on this website prior to purchasing any product. Choosi offers insurance products from a range of brands but does not compare all products available in the market.

Search blog

Topics

Signup to our newsletter

GET MORE ARTICLES

Receive articles, news & tips as soon as they are published. We'll send occasional updates on the latest product offers, competitions and more!
By subscribing you consent to us contacting you and agree to our Privacy Policy



Related articles

Income Protection Insurance 101
19 Aug 2016

Income Protection Insurance 101

Fast track your path to financial protection with our quick fact guide on income protection insurance. 

Read More
TOPICS:
Earning on the side - is it really worth it?
24 Jun 2014

Earning on the side - is it really worth it?

Here are some important considerations you need to think about before turning your hand at boosting the home coffers.

Read More
TOPICS:
Income protection insurance for contractors & full-time employees
01 May 2015

Income protection insurance for contractors & full-time employees

Do you have enough money saved up to tide you over for a few months or longer if something happened to prevent you from working?

Read More
TOPICS:

Ready to compare?